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CORONADA COAL COMPANY 

vs. 

UNITED MINE WORKERS 



AN ANALYSIS OF THE DECISION 

of the 
UNITED STATES SUPREME COURT 



By Walter Gordon Merritt 



June, 1922 



Compliments of 

League for Industrial Rights 

42 Broadway, New York City 









.A- 



MJ6 28 ,'32i 



AN ANALYSIS OF THE DECISION OF 

THE UNITED STATES SUPREME COURT 

IN THE CORONADA COAL CASE 

CHE case of the Coronado Coal Com- 
pany against the United Mine 
Workers of America and others, 
grew out of a condition of lawlessness and 
violence which confronted the efforts of cer- 
tain coal mines in Arkansas to operate on 
the open shop basis. It appeared that the 
United Mine Workers was an unincorporated 
association with a membership of about 
400,000 men engaged in the mining of coal 
in the different coal mining States, and sub- 
divided into thirty districts and numerous 
local unions. This international organiza- 
tion had for many years been engaged in a 
combination and conspiracy to prevent the 
production of coal by open shop mines in 
order thereby to protect the products of 
union mines from non-union competition in 
the ordinary channels of interstate trade and 
commerce. In pursuit of this purpose it had 
engaged in a policy of organized lawlessness 
against open shop coal mines in Colorado, 
Pennsylvania, Virginia, West Virginia and 
other States. 

In 1914 a campaign of organized violence 
and destruction of property was carried on 
against the complainants' open shop opera- 
tions in Arkansas, which resulted in the de- 
struction of practically all of their destruct- 
ible property and' damages estimated to be 
$740,000. The complainants sought treble 
damages of $2,220,000 under the federal 



anti-trust law and a jury trial resulted in a 
judgment of about $700,000. 

The fundamental questions of general in- 
terest presented on the appeal to the United 
States Supreme Court, were the following : 

1. Suability of unincorporated un- 
ions. 

2. What evidence is necessary to 
connect a national or district organiza- 
tion with a local strike ? 

3. What evidence is necessary to 
show that the purpose of a strike is to 
restrain interstate trade? 

The unusual result of a unanimous deci- 
sion by the Supreme Court renders the case 
of unusual decisiveness and importance to 
the Industrial World. 

SUABILITY OF UNIONS 

The most important point involved in the 
case is the conclusion that unions, though 
unincorporated, are suable in the federal 
courts in any class of cases over which those 
courts have jurisdiction. Both the Interna- 
tional Union and its branch District 21 were 
therefore properly sued. 

Prior to this decision it was the law that 
a voluntary association was not suable at 
common law, so that, in the absence of 
statute, a suit on the law side of the court 
solely for damages could not be maintained 
against an unincorporated labor union; but 
in suits in equity for an injunction, where 
damages were also sought as an incident of 



the suit, it was possible to reach the union 
funds by suing either the union or suing the 
officers thereof as the representatives of all 
of the members. There was, therefore, a gap 
in the principle of legal responsibility of 
labor unions in actions at law for damages, 
which had been met by about twelve states 
through the enactment of enabling legisla- 
tion. 

In presenting the case of the Coronado 
Coal Company to the Supreme Court, counsel 
pointed to changed conditions and the neces- 
sity for collective responsibility as an inci- 
dent of collective action, but rested their 
contentions primarily on the federal anti- 
trust law which expressly stated that the 
word "person" as used in the act included 
"associations." The Supreme Court empha- 
sized the changed industrial conditions, the 
tendency of courts of equity to bring unions 
before the courts, and the numerous statutes 
passed by Congress and the different states 
recognizing the legal existence of labor 
unions, protecting their union labels and 
property, and providing for union represen- 
tation on statutory arbitrations and official 
labor boards. 

"It would be unfortunate," said the 
court, "if an organization with as great 
power as this International Union has 
in the raising of large funds and in 
directing the conduct of four hundred 
thousand members in carrying on, in a 
wide territory, industrial controversies 
and strikes, out of which so much un- 
lawful injury to private rights is pos- 
sible, could assemble its assets to be 
used therein free from liability for in- 
juries by torts committed in course of 



such strikes. To remand persons in- 
jured to a suit against each of the 
400,000 members to recover damages 
and, to levy on his share of the strike 
fund, would be to leave them remedi- 
less. * * * 

Though such a conclusion as to the 
suability of trades unions is of primary 
importance in the working out of jus- 
tice and in protecting individuals and 
society from possibility of oppression 
and injury in their lawful rights from 
the existence of such powerful entities 
as trade unions, it is after all in essence 
and principle merely a procedural mat- 
ter. As a matter of substantive law, all 
the members of the union engaged in a 
combination doing unlawful injury are 
liable to suit and recovery, and the only 
question is whether when they have 
voluntarily, and for the purpose of ac- 
quiring concentrated strength and the 
faculty of quick unit action and elasti- 
city, created a self-acting body with 
great funds to accomplish their purpose, 
they may not be sued as this body, and 
the funds they have accumulated may 
not be made to satisfy claims for inju- 
ries unlawfully caused in carrying out 
their united purpose. 

In this state of federal legislation, we 
think that such organizations are suable 
in the federal courts for their acts, and 
that funds accumulated to be expended 
in conducting strikes are subject to 
execution/ in suits for torts committed 
by such unions in strikes." 

Hereafter, the doors of all of our federal 
courts are open to suits against labor unions 
in all cases where, by reason of the statute 
involved or diversity of citizenship, the fed- 
eral courts have jurisdiction. It is also prob- 
able that some of the state courts, influenced 
by the soundness of this legal reasoning and 
social policy, and the persuasiveness which 



follows any decision of this distinguished 
court, will reach a similar conclusion. 

In the business world several results are 
probable : 

Labor unions, finding that responsibility 
is no longer optional and cannot be escaped 
by remaining unincorporated, will seek the 
advantages of incorporation for much the 
same reasons that business men incorporate. 
A sharp line of distinction will be drawn be- 
tween union funds for benevolent purposes 
and funds for strikes and the two funds will 
not be transferable. Unions' responsibility 
for the conduct of their strikes being affirma- 
tive, they will closely supervise and control 
them. The more responsible unions, and 
particularly the national organizations with 
large incomes and accumulated funds, which 
are dependent on continued existence to pre- 
serve their prestige, will be obliged to exer- 
cise greater care in the selection of officers 
and agents to conduct their activities, in 
order that the union funds may not be jeop- 
ardized through unlawful acts. That is the 
virtue of responsibility. It may lead to the 
development of a better unionism in some 
trades. 

LIABILITY OF THE UNITED MINE 

•WORKERS OF AMERICA AND 

DISTRICT 21 

The court found that there was no evi- 
dence sufficient to go to the jury as to the 



liability of the International Union because 
ft did not appear that the International 
Union had in any way authorized, financed 
or conducted the strike, and under the Inter- 
national constitution, neither it nor District 
21 in its behalf could conduct said strike 
without the sanction of the International 
Board or Convention. The strike in ques- 
tion, held the court, came exactly within the 
definition of a local strike called on the sole 
responsibility of the District under the con- 
stitutions of the International and District 
unions. Evidence that communications from 
outsiders and editorials were published in the 
official journal giving an account of the law- 
lessness; that the president of the Interna- 
tional Union, who had no authority to order 
or ratify a strike, reported on the strike to 
the International Board and delivered an 
address in the vicinity of the strike in which 
he did not specifically refer to the strike ; that 
he thanked President Wilson for pardoning 
one of the district officers who had been con- 
victed of a crime in connection with the 
strike — was held insufficient to constitute a 
ratification of the strike by the International 
organization. 

Counsel for the operators contended that 
because the International Union had the 
power to discipline the district organization 
and to adopt and direct local strikes, there 
was imposed upon it a duty to "prevent its 
becoming lawless," but the court said: 



"We do not conceive that such respon- 
sibility is imposed on the National body. 
A corporation is responsible for the 



wrongs committed by its agents in the 
-course of its business, and this principle 
is enforced against the contention that 
torts are ultra vires the corporation. 
But it must be shown that it is in the 
business of the corporation. Surely no 
stricter rule can be enforced against an 
unincorporated organization like this. 
Here it is not a question of contract or 
of holding out an appearance of author- 
ity on which some third person acts. It 
is a mere question of actual agency 
which the constitutions of the two 
bodies settle conclusively. If the Inter- 
national body had interfered or if it had 
assumed liability by ratification, differ- 
ent questions would have arisen. ,, 



The court found District 21 to be so 
clea/rly responsible for the lawless acts as 
probably to justify the direction of a verdict 
against it, were that the only point involved, 
and refused to "yield to the argument that 
it would be necessary to show the guilt of 
every member of District 21 and of each 
union in order to hold the union and its 
strike funds to answer." 

The District Union had authority to order 
the strike in its own behalf "and if, in the 
conduct of that strike, unlawful injuries are 
inflicted, the District organization is respon- 
sible and the funds accumulated for strike 
purposes may be subjected to the payment of 
any judgment which is recovered." 

The opinion of the court on the liability 
of unions does not bring out new principles. 
Where the constitution of the International 
Union, which is its organic law, prohibits it 
from participating in a local strike, except 
under certain terms and authorizations, and 



such conditions are not complied with, the 
court, in the absence of actual participation 
by the organization, will not infer liability 
on the theory of implied sanction or ratifica- 
tion without clear proof. Where the union 
is actually conducting the strike, as in the 
case of District 21, the court will hold the 
union liable for unlawful conduct growing 
out of that strike, without proof that every 
member is guilty. 

INTENTION TO RESTRAIN INTERSTATE 
TRADE 

If the International Union had been con- 
nected with the lawless acts and the case 
against it had not been dismissed, the evi- 
dence of intent to restrain commerce would 
have sufficiently appeared from its past 
operations in different states and its repeated 
declarations about non-union competition. 
With the International Union excluded for 
lack of authorization and participation, the 
question arose as to what proof was neces- 
sary to impute to District 21 an intention to 
restrain interstate commerce by interfering 
with the production of goods which, if pro- 
duced, would ultimately flow into commerce. 

In this respect the court found that the 
complainant had failed to present sufficient 
evidence to justify the submission of the case 
to the jury. It pointed out that the produc- 
tion of coal was not interstate commerce 
even though the coal is to be subsequently 
shipped in interstate commerce, and held in 
effect that the obstruction of production 



under such circumstances did not constitute 
a violation of the Anti-Trust law, unless the 
intent to restrain interstate commerce ap- 
peared "as an obvious consequence of what 
is to be done, or be shown by direct evidence 
or other circumstances." 



"What really is shown by the evidence 
in the case at bar, drawn from discus- 
sions and resolutions of conventions and 
conference, is the stimulation of union 
leaders to press their unionization of 
non-union mines not only as a direct 
means of bettering the conditions and 
wages of their workers, but also as a 
means of lessening interstate competi- 
tion for union operators which in turn 
would lessen the pressure of those 
operators for reduction of the union 
scale or their resistance to an increase. 
The latter is a secondary: or ancillary 
motive whose actuating force in a given 
case necessarily is dependent on the par- 
ticular circumstances to which it is 
sought to make it applicable. If unlaw- 
ful means had here been used by the 
National body to unionize mines whose 
product was important, actually or 
potentially, in affecting prices in inter- 
state commerce, the evidence in ques- 
tion would clearly tend to show that 
that body was guilty of an actionable 
conspiracy under the Anti-Trust Act. 

* * * But it is not a permissible in- 
terpretation of the evidence in question 
that it tends to show that the motive 
indicated thereby actuates every lawless 
strike of a local and sporadic character, 
not initiated by the National body but 
by one of its subordinate subdivisions. 
The very fact that local strikes are pro- 
vided for in the union's constitution, 
and so may not engage the energies or 
funds of the National body, confirms 
this view. Such a local case of a lawless 
strike must stand on its own facts and 
while these conventions and discussions 
may reveal a general policy, the circum- 



stances or direct evidence should supply 
the link between them and the local 
situation to make an unlawful local 
strike not initiated or financed by the 
main organization, a step in an action- 
able conspiracy to restrain the freedom 
of interstate commerce which the Anti- 
Trust Act was intended to protect." 



The court found that there was ample ex- 
planation for the conduct of District 21 
without imputing to it the intent to restrain 
interstate trade. It pointed out that the 
president of the union had stated that they 
were not going to let the complainant dig 
coal with "scabs," that the complainant had 
breached its contract with the union and 
had been guilty of various provocative acts 
by way of preparation for the trouble, which 
were calculated to arouse local bitterness 
independent of any interstate scheme and 
that the smallness of the output of the com- 
plainant's mines as compared with the total 
output of the nation or within the district, 
was not such as to lead to the inference of a 
purpose to restrain commerce. The fact that 
the success of the complainant might lead to 
a defection among union operators which 
would in the end spread to other operators 
and thereby affect interstate commerce, was 
a remote contingency and there was nothing 
in the evidence that those who participated 
in the local strike had this remoter conse- 
quence in view. 

From this decision it may be concluded 
that unlawful strike activities to obstruct the 
production or manufacture of goods which 
are to be shipped in interstate commerce does 



not necessarily constitute a combination in 
restraint of interstate trade under the terms 
of the Anti-Trust law. To maintain such an 
action it must appear from other circum- 
stances that those engaging in such unlawful 
acts have for their object not merely the ac- 
complishment of some local purpose but the 
cutting off at the source of supply of goods 
for interstate trade. 

"And so in the case at bar, coal min- 
ing is not interstate commerce and ob- 
struction of coal mining, though it may 
prevent coal from going into interstate 
commerce is not a restraint of that com- 
merce unless the obstruction to mining 
is intended to restrain commerce in 
it or has necessarily such a direct, mate- 
rial and substantial effect to restrain it 
that the intent reasonably must be in- 
ferred." 

Where unlawful strike activities are en- 
gaged in by national unions in one state for 
the primary purpose of protecting union 
competitors from the competition of the con- 
cern which is attacked, a case may be brought 
under the Sherman Anti-Trust law, but the 
court will not presume that such is the pur- 
pose from the mere circumstance that pro- 
duction for interstate commerce is ob- 
structed. It must appear that one of the 
principal purposes relates to matters outside 
of the factory or mine and that the suspen- 
sion of trade in the products of that mine 
or factory is a means adapted to the attain- 
ment of that external object. 



LIBRARY OF CONGRESS 



027 292 885 A 



